Task Description Suggested output 1 Individual Activity Investment Appraisal Riverside Motorcycle Components Ltd Case Study Riverside Motorcycle Components Ltd. has carried out some research that shows that the business could provide a standard service that it has recently developed. 1. Provision of the service would require investment in a machine that would cost 100,000 payable immediately Sales of the service would take place throughout the next five years. At the end of that time, it is estimated that the machine could be sold for 20,000 2. Sales of the service would be expected to occur as follows: Next year (year 1) Second year Third year Fourth year Fifth year Number of units 5,000 10,000 15,000 15,000 5,000 3. It is estimated that the new service can be sold for 12 a unit, and that the relevant variable costs will total 8 per unit 4. The company's cost of capital is 12%. Required: 1) Calculate the annual cash flows for each of the five years. 2) Calculate the ARR, Payback, NPV and IRR